Investor Q&A

Dear Shareholders, In the following, we comment on questions that are posed to us frequently.

Company

What is the main responsibility of the Administrative Board and how do they keep oversight?

Corporate Governance is the main responsibilities of the Board, which the members are personally liable for as with any public company with a professional Board. All members of the Board have skills and competences adding value to the company. Regular Board meetings take place five times p.a. while extraordinary meetings with the full Board take place ad-hoc if necessary. The Administrative Board has full access to information related to their body of duties.

How do RIB's R&D investments compare to the peer group?

To ensure a correct comparison, absolute numbers does not support anything as we could also compare with Apple, Amazon and others tech giants. However, in percentages of the software revenue and not total revenue, you will from the below see that our investments are rather significant also compared with our peers.

In addition to this, we have done two strategic decisions of 1), moving to new technology platforms where more talents are available and the actual coding is simpler and more efficient and 2), building a full stack development centre in China where cost of talents are lower, which adds an additional multiplier in man-years of resources for the same investment.

Additionally, our R&D investments predominantly flows into one product group, namely iTWO rather than into multiple tools and platforms on different technology and tech stacks like some of the peers suggested.

As a final thing, the numbers do not include the very expensive and comprehensive R&D investments we get in terms of resources from our partners e.g. Microsoft. With Microsoft we are having monthly hackathons, where Microsoft experts are participating in RIB related projects such as AI for MTWO and more further adding to the outcome and efficiencies despite not adding costs.

Why do RIB choose to not have debt at this point in time (Q3 2018) but cash reserves in the balance sheet?

RIB is still in an early growth stage and as such prefer not to limit our speed of execution by taking in debt in any form, allowing management to execute quickly under the mandate given, which we believe is a competitive advantage of RIB.

We have built a cash reserve of approx. € 100 million which caters for several needs: A) in negotiating with major companies on substantial Phase II / III deals they are buying perpetual licenses, and as such the cash reserve supports de-risking these deals from the client’s point of view, as we have cash reserves to support their investment even in an eventual downturn. B) The cash also sits as a fund for major strategic acquisitions should an opportunity emerge. Unfortunately, we have missed out on such an opportunity due to insufficient cash position in the past.

RIB is prepared and capable of doing major acquisitions and have a solid track record of successful M&A assignments.

What is Mads Bording's specific software or technology background that makes him an asset for the COO/CTO role?

Mads Bording pioneered a software company in the Nordics based on SaaS and multi-tenant architecture, scaling it to sell in multiple countries with high growth and profit lines becoming one of the leading construction tech companies in the region. The company was acquired by RIB in 2014 and Mads has decided to stay with RIB after the Lock Up period first as CEO for Europe International, then COO and Managing Director with a contract term till the end of 2020. Mads holds a Master of Science and an Executive MBA, worked in the financial industry, as a management consultant and throughout his tenor build, bought and sold companies adding to his experience base besides his entrepreneurial spirit and belief in RIB’s vision.

How is the R&D organised between the key sites in China, Germany and USA?

R&D projects are following scrum/agile methodology and has assigned dedicated teams and leaders. All project leaders refer to regional Managers. The development and tech stack are partitioned into infra, core development, application specific teams and regional solution centres responsible for localisation. This gives full transparency across teams, projects and stack and allows us to work on same projects across different teams in different physical locations. Reporting on R&D progress is collected across regional R&D leaders and reported to the Managing Directors.

Who are the key senior managers in RIB with responsibility for technology investment and innovation?

We have a broad organisation with deep knowledge supporting innovation and practice “open innovation” across departments, geographies and organisation. RIB cannot accept to be dependent on single individuals either in the Board or in the organisation, why our talent pool is vast and wide.

When comparing the company's profitability, size, R&D spending and product range, who should be considered in the appropriate peer group?

We tend not to focus too much on what other companies are doing and differentiate between conglomerates with product suites and companies with integrated solutions, companies with proprietary views and Eco-systems / platform businesses. As such we currently believe that we are the only company with a fully developed end-to-end eco system on a cloud platform. However, we are happy to follow how the narrative in our industry is changing from tool and silos into integrated solutions, not only from the market, but also from peer companies, management consultants, leading universities and World Economic Forum.

Replacement of non-executive Director Steve Swant

Steve Swant leaves the Administrative Board of RIB due to an alleged conflict of interest between his Employer Georgia Tech University and RIB SE following his resignation on July, 19, 2018, effective August 13, 2018.

Steve Swant has served on the RIB Administrative Board since 2015. With the permit of the university and its President he joined an average of 3 full-day board meetings and one telco per year. Steve’s business and leadership expertise has highly contributed to the successful development of RIB. Steve had to travel to Stuttgart to perform the 3 days board meetings per year. He used his travel time to and in Stuttgart to remote serve in parallel for Georgia Tech.

Steve is a real advocate of BIM 5D Technology and believes strongly that universities should reinvent themselves and act as a LAB and front runner of disruptive and digital transformation technologies. He joined the expert community platform iTWO World conference for 3 years. In the yearly iTWO World conferences included both RIB and other World Leading experts out of universities, government, multinational companies and consulting firms from over 30 countries are exchanging their experience and progress within CAPEX related digital transformation projects. Steve has positioned his university GT as a World Leader and exchanged know how with over 100 top global experts.

Professor Chuck Eastman from Georgia Tech is seen as the father of BIM and therefore Steve had the target to open the door for the usage of BIM 5D technology to generate cost savings and benefits on the CAPEX and OPEX yearly campus construction spending. He targets to develop a BIM 5D “best practice” for the education industry. RIB also sponsored a successful course in GT using iTWO Technology with over € 140,000 in cash and man-days.

After Steve joined the RIB board in the years 2015-2018 RIB delivered consulting services of € 290,000 within multiple campus projects and sponsored courses with € 140,000. Based on the Group audits RIB never made any profit margins out of GT orders and sponsored man-day (not paid by GT) in a sum of € 357,000 in this period.

Before Steve was elected by RIB AGM in June 2015 there was an initial Tech Tower order one year before with a value of around 1,0 m EUR between RIB und GT. This order was not initiated and negotiated by Steve Swant but by another leader of GT.

Steve had to manage a lot of conflicts internally based on the organizational and transformational change management tasks. Steve´s RIB’s Administrative Board position initially was approved by the university and its President. Steve resigned his non-executive board position due to conflict concerns

We thank Steve for his great contribution to RIB, the BIM 5D visionary community and especially to the building and education industry. We are 100% sure, that the BIM 5D technology, based on the ideas of Chuck Eastman and Steve Swant will redefine the management of CAPEX and OPEX spending in universities in the future.

Explanations to Baufabrik GmbH

Baufabrik GmbH is 100% owned by RIB Software SE and has been inactive since 31 March 2016.

What is the relationship between Thomas Wolf and Mühl 24 GmbH?

The building materials trading company Mühl was originally founded in 1928 in Central Hesse by Hermann Mühl, the great-grandfather of Thomas Wolf. In 1988, Thomas Wolf joined the company in the 3rd generation as a shareholder. As part of the IPO of the East German technology company Mühl AG in 1995, in which Mr. Thomas Wolf indirectly held a stake of approximately 30% via a holding company, the IPO banks demanded the contribution of the family business. The technology company in the construction industry, Mühl AG, was listed in the “New market” stock segment from 1997 onwards.

Due to the collapse of the “New market” and the associated insolvency plan procedure of Mühl AG, Mr. Thomas Wolf bought back the company (today Mühl 24) in 2002.

He is a 100% shareholder of Mühl 24 GmbH and does not have an operating role. The company generates approximately € 25 million in revenues with approx. 100 employees. Thomas Wolf plans to pass the company on to the 4th generation within his family.

What is the relationship between Thomas Wolf and Sandy Möser?

Ms. Sandy Möser was Executive Board Member of the technology company Mühl AG until 2002 and then the sole Managing Director of Mühl 24 GmbH.

Sandy Möser was the Chairwoman of the Supervisory Board of RIB Software AG from 2010 to 2017 and has been Deputy Chairwoman of the Administrative Board of RIB Software SE since the SE conversion in 2017. In addition to Mr. Wolf, the Administrative Board consists of seven operational and non-operational directors. Thus, of the seven directors, there are six independent directors.

Why does Thomas Wolf own offshore companies?

Thomas Wolf has been resident in Hong Kong since 2002. In Hong Kong, it is common for residential real estate and corporate investments to be held via offshore companies. In addition to holding assets, the companies have no operating activities.

Business relationships between Mühl 24 and the RIB Group / xTWO in 2017

XTWO GmbH, which is wholly-owned by RIB, has rented office- and logistics space for a total of approx. € 60,000.00 per year. The rental price per square meter is about 2 euros. The valuations are well below market value and can be terminated at short notice.

How is the liquidity of the RIB Group regionally distributed? (as at 04/2018)

What is the organic growth rate of RIB in iTWO division?

MTWO

Further information on the strategy regarding the MSP acquisitions

Most successful SaaS companies have built a comprehensive sales and distribution network among many Microsoft, Autodesk, Dassault, Adobe and SAP. With MTWO RIB offers a SaaS solution in the market as a platform and eco-system of applications very suited for this strategy.

MSP’s have key domain expertise in cloud technology and as such little regarding client server- and desktop-based technologies. RIB fully believe in the movement towards cloud, while these key skills of the MSP network will be a highly valuable expertise and we believe that the supply and demand equilibrium will change putting more power with the MSP’s. RIB is mainly focusing on a specific blueprint including but not exhaustive:

• Asset light and not former “hardware as a service” type of companies

• Clients or IP’s in construction

• Access to markets where RIB would have difficulties in entering organically

• Strategy to develop from horizonal service company into vertical focused and IP focused business

• Year on year growth preferable top- and bottom-line

• Strong management and team

As such our investment thesis is, that we can buy undervalued assets, with proceeds earmarked for building a dedicated MTWO team under the management of the MSP dedicated to selling and deploying MTWO in accordance with the business plan.

It is important to understand the underlaying business of an MSP. Besides being experts in spinning up software on cloud- and preferable Azure stack, the MSP’s of interests to RIB have different core capabilities such as Data Security, AI and Bot services, Big Data, Scalability, cloud resource optimization and more. No one MSP holds these capabilities to best-in-class levels, why part of our strategy is to build a global network of MSP’s for distribution. ICS and A2K Technologies have specific capabilities which will prove valuable.

First wave (of several waves to this sale- and distribution strategy) is to secure an equity stake in a selected number of MSP’s following the above, and then expand with other waves to this strategy.

RIB does not buy a majority, as we want the MSP to have management control and execute on the value creation. However, we do have options in place for buying the majority making it a possibility to consolidate the network in the future.

How many more MSP deals do you expect to complete in 2018?

Our target for 2018 is 3-5 MSP’s of different size and with different key capabilities. From the announcement on September 26th with the second acquisition the direction should be clearer. Our strategy is described above in further details.

YTWO

Why has YTWO not announced additional customers in 2018?

Operational questions regarding YTWO should be addressed directly to YTWO. YTWO is a company of its own, but RIB as a co-owner is pleased with the clients landed e.g. the worlds number 1 developer. Besides the potential in disrupting the supply chain, YTWO has the potential of generating iTWO users which is a positive benefit for RIB. RIB is very pleased about this opportunity and the general business outlooks for YTWO.

How much liquidity is available in YTWO Ltd. as of 31.12.2017?

USD 66.7 million (€ 55.6 million converted at the closing USD/€ exchange rate on 31.12.2017).

Details on YTWO signings

To date, YTWO is working together - based on signed agreements - with five companies in its three target geographies Germany, China and the US:

Christoph Gröner (CG) Group: The CEO of CG Group was introduced to YTWO by RIB Stuttgart. The CG Group is one of the top 5 real estate developers in Germany, employing approx. 250 people and with a multibillion project portfolio in multiple German cities. Mr Gröner, the CEO of CG Group, is a thought leader and business evangelist in the industry. CG Gruppe signed an YTWO agreement in March 2017.

MyHome: The Chairman of MyHome Group was introduced to YTWO by RIB Guangzhou. MyHome is planning to build pre-fabrication factories to become a market leader in China. Today already, MyHome is one of the most famous housing companies in China. MyHome signed an YTWO agreement in June 2017.

Country Garden (listed on the Hong Kong stock exchange, HKG: 02007): The CEO of Country Garden was introduced to YTWO by RIB Guangzhou. Country Garden is one of the world’s largest real estate companies and has signed an YTWO agreement for running a pilot project with five high-rise buildings in the Forest City project in Malaysia. The agreement was signed in November 2017.

ROY Ceramics SE: The Lee Family, the majority shareholder of ROY Ceramics SE (“ROY”), which is also a majority shareholder in Lee Pharmacy (listed on the Hong Kong stock exchange: 00950 HKG, Market cap over 500m Euro) was introduced to YTWO over the RIB CEO, who is a family friend with Benjamin Lee, the CEO of Lee Pharmacy. ROY Ceramics sold its sanitary factory in Beijing in 2015 and started a property developing business in the United States, with a strong focus on Houston and LA. The planned single and multi-family home pilot projects have a project volume of over 60m USD, with further projects being expected soon and already under consideration. In addition, ROY rents a small office space in Hungen from Mr. Wolf for 1500 Euro net rent per year. ROY’s CFO, Flex’ CEO and RIB’s CEO signed an YTWO agreement during the iTWO World conference in November 2017 in Guangzhou.

American Housing Company: Flex’ CEO, Mike McNamara, introduced the American housing companies’ head of strategy and CEO to YTWO. YTWO is now used within a pilot project (a community of single family houses) in California. YTWO signed a pilot project agreement in 2017.

With iTWO Smart Production, RIB is an IT market leader in equipping precast plants in the construction industry in Europe and Asia. Flex is the global leader in supply chain management and operates production plants in 30 countries for leading industries.

The state of Thuringia provides EUR 10 million for the construction of a new generation of factories in Thuringia. The aim is to create affordable housing in Germany. The basic utilization of the factory is guaranteed by YTWO customer CG Gruppe AG.

Flex plans to operate the plant in the future and RIB plans to supply the IT technology. RIB and Flex plan to present the future model EMC to their international customers on site as a European model enterprise and have indirectly invested EUR 1 million (10%) in equity through their joint venture YTWO.